Partial credit

Written By: - Date published: 11:36 am, December 19th, 2008 - 28 comments
Categories: economy, national/act government - Tags:

Yay, more infrastructure spending during a recession. That’s the right thing to do – stimulate the economy and spend while the price of construction is lower.

But why, oh why, cancel spending on rail and housing insulation and put the money into roads, instead?

The only reason I can think of is that National/ACT doesn’t like KiwiRail and insulation because they were the Left’s iniatives. There is certainly no pragmatic reason to drop them. From both an environmental and economic stand-point investing in rail and warmer homes are the best options. The payoff from insulation alone is $4 for every dollar invested. We need more roads in the age of peak oil like we need a hole in the head.

Unfortunately, we’re still not seeing much of this much-vaunted Key pragmatism (in fact, we’re not seeing much of Key at all). In its place, we’re seeing typical tory thinking as we go from clean and green to grey and grubby.

28 comments on “Partial credit”

  1. sweetd 1

    Why was insulation promised by Cullen then no money allocated by him for it?

  2. George Darroch 2

    To be fair to NACT, the last Government was pretty keen on building roads, and wouldn’t provide the cost/benefit calculations where asked.

    Still pretty poor though. Especially when, as you note, there are other things to be spending money on. Those two aren’t the only ones though, there is a whole list of money saving investments that the Government could participate in if it wanted.

  3. Graeme 3

    Yeah – I don’t know their details, but the argument from National seems to have been that there wasn’t actually any money planned for spending on rail nd insulation. There was $X, Labour had plans to spend $Y of it on one thing, and $Z of it on something else, and all of that $X was planned to be spent. And then they said they’d spend $A on something $B on something else, but there was never any money to actually pay for it.

    That’s the argument anyway; I’m very interested in your take on it.

    • Graeme. It doesn’t matter if there was previously budgeted money or not. The spending on rail and house insulation was going to come out of the same captial spending alowance that National/ACT is now planning on spending on roads. No matter the technicialities there is a choice to be made over where to spend the money – rail and home insulation are much better options than roads.

  4. Peter Wilson 4

    Yep, if we want to address both this current crisis and prepare for the future on the far side of the forbidding looking Hubberts Peak there aren’t many better options than to invest in rail. Investment in rail would revitalise regional economies, increase both the speed and the efficiency in which stuff travels around the country, as well as leaving a decent bit of infrastructure in place for the future.

    As the availability of oil declines (just wait for the huge price spike in the next year or so when the world economy restarts) the ability for us to rebuild a rail system will start to disappear. Although, we did build most of our rail system a long time before oil became readily available, but that relied on a large amount of human labour.

    Much easier if we do it now before we need it, but since when have tories ever invested in the long term (except if its the long term lining of their pockets).

  5. infused 5

    I really see no point building rail in New Zealand. I’ve actually been doing a lot of research on electric powered cars over the last few weeks and man, they are such a good option now. The only thing holding them back is the price of the batteries.

    We are always going to need roads. New Zealand has been ‘designed’ in such a way that we will always need a form of transport like this.

    And Peter, you’re not going to see the world economy restart next year. We haven’t even hit the crisis yet. Come back to this post in 6-12 months.

  6. sweetd 6

    Infused

    latest episode of Top Gear (Series 12, episode 6 or 7, not shown in NZ yet) James May drives the new Honda hydrogen powered car, which looks and drives just like a normal car, no need for those pesky batteries. Just fill the baby up with hydrogen and she’s good for 300km’s. The Tesla is very good electric sports car, but as they (again Top Gear) show it runs out of juice after 50 kms of hard driving, and needs 16 hours to charge up again. Apparently (as they say on the show) hydrogen isn’t too tricky to get and is very abundant. Peak oil, humbug. Greenies will need to bleat about something else as science has once again saved the day.

  7. jagilby 7

    “no pragmatic reason to drop them.”

    I don’t see any pragmatic reason why any purchaser would pay a 100% control premium for any asset, that’s just me though. In the business of buying and selling assets there is a recognised term that you can apportion to such indulgence though – that term is being “irrational buyer”.

    You are right though – there is no pragmatic reason to drop Kiwi Rail now… doing so would mean realising that “irrational buyer premium” as a loss…. well some of it anyway, most of it was realised almost immediately through impairment, unsurprisingly.

  8. the sprout 8

    “why, cancel spending on rail and housing insulation and put the money into roads”

    umm, could it be the Roading Lobby has a lot of friends in National?

  9. insider 9

    Your $4 figure for insulation seems questionable. Where did you get that? [from this widely-reported study http://www.thestandard.org.nz/the-housing-question/ SP] Even Ralph Chapman says it is only 1.73 and he has a keen interest in promoting this area.

    SweetD

    Hydrogen is very tricky and very expensive. It is hard and costly to free it into a state able to be burnt for energy – the major sources being hydrocarbons or water. It is really hard to store because to get the density needed for a fuel it needs to be highly compressed. That’s why it is still experimental.

  10. Peter Wilson 10

    Infused – interesting comments:

    You’re right about the global economy – my prediction of a rebound within a year is probably a little optimistic. I’ll come back to my post within two years! The basic point remains though, without new investment oil production declines by 6-8% per year (IEA assessments). So, with the credit crunch all sorts of oil projects have been placed on hold, and given the lag time that there would have been before production came from the new projects, this means a serious price spike when things sputter into life again.

    In terms of your comments about rail and electric vehicles there’s two points I need to make.

    1) Rail is the single most efficient (physics, not economics) way of moving stuff long distance on land. Electric vehicles might work for moving people short to medium distances, but using them for freight is never going to be a goer, due to the simply prohibitive cost of the batteries.

    2) When considering the energy economics of hybrid and electric vehicles you really need to take into account the energy costs of producing the things. A hybrid or electric car has a huge energy cost of construction, due to its complexity and the amount of rare elements used in the batteries. In a world with increasingly scarce energy, there is simple no way you could replace a car fleet with these hybrids or electric vehicles (2.5 million cars in New Zealand?).

    By the same token hydrogen is not a source of energy, it’s a way of storing or transferring energy. Creating hydrogen requires an external energy source, which in most countries is electricity from burning fossil fuels. Hardly a sustainable option then. NZs a little better, but we hardly have the capacity in our power system to meet vehicle charging demand.

    Finally, NZ as a country was designed a long time before roads. It was rail and coastal shipping which connected the place and set the pattern of settlement and development. Roads came along later of course, once we had sufficient energy to build them. I would assume that as energy depletes, we’ll go back to rail.

  11. Edosan 11

    Cancel spending on rail? But national love rail! See…

    http://nathanguy.co.nz/index.php

  12. roger nome 12

    Insider – who cares? It’s an initiative that will save the government money, and better many thousands of peoples’ lives – so why the hell are the Tories choosing to scrap it? It’s madness.

    In general, we need to adopt a “fence at the top of the cliff” approach to social issues – with the 1980s and 1990s came an extremist “ambulance at the bottom of the cliff” mentality, that was purely ideological, neoliberal and anti-pragmatic – and Clark’s government didn’t do nearly enough to change that.

    If we only ditched the punitive “beat up the poor” mentality, we could save billions of dollars and have a far healthier, happier society. Take a look at this recent report for instance:

    http://www.stuff.co.nz/4795187a6160.html

  13. infused 13

    sweetd: Actually, new cars will go 120km while bring thrashed. The cars are the new GM ones with nickle batteries. NiHM. It went 300km while being driven normally over hills and what not. I’ll try locate the article.

    50km will be lead based.

    Hydrogen takes 3x as much energy to make than petrol… so it’s not really better.

    Peter Wilson: I fully agree about freight. My comments were based on passenger rail. I don’t agree with that at all.

  14. djp 14

    pile more malinvestment upon a correcting market.. what a novel idea

  15. Anita 15

    infused,

    Why don’t you agree with passenger rail? At the moment I’m working a couple of days a week in Palmerston North but I live in Wellington. PN-Wgtn is a great passenger rail line; it’s fast, environmentally much better than cars, buses or planes, and much much safer.

  16. sweeetdisorder 16

    Infused

    GM ones you say? The same company being bailed out at the mo. I hope some engineer has the good thought to keep the plans in his back pocket so they are not lost to time when the factories are shut.

    The program (top gear yet again….) went on to say about hydrogen that if you put the same amount of resources that you do into getting oil out of the ground into producing hydrogen, then it would be about the same price and difficulty. I am only going off what the program said, I have no great knowledge in this area so I bow to anyone who professes any skills at getting cheap hydrogen to the pumps.

    BTW, has a great bit with Boris Johnson (Mayor of London) as the guest in the reasonably priced car. I love the guy but it looks like he is on coke or something.

  17. Con 17

    Trains are socialist technology; that’s why the Nats don’t like them. Where’s the competition? They’ve tried organising competition and failed miserably. The only way to run rail in NZ is as a state-owned monopoly. From the Nats’ point of view, then, better to just run it into the ground.

  18. Macro 18

    We were discussing this matter the other day at smoko. The compactor driver wondered why the govt were fixated by motorways? – Where are the jobs for us? It takes only a few people to build a motor-way and heaps of money in materials. He’s right. We still need more houses – NOT the expensive housing developments the country has been building for the past 10 years but good quality, energy efficient, low cost housing. Yes it is possible. We are working on such a development in Mangere at the moment. (small and infill tho) There is much more work generated in sub division development,- earthworks, civil, drainage, telecom, power, builders etc. Our major cities septic and stormwater systems are also in need of upgrading. Not very sexy. But that is where the work is.

  19. Joshua 19

    What rail projects suffer? Electrification of Auckland’s system? The Manukau rail spur? Surely not the already built Onehunga line.

    The CBD rail loop tunnel looks like the obvious casualty, which is annoying as basically Auckland’s rail system is going to be stuffed in about 5-10 years time without it.

  20. Swampy 20

    The investment proposed in Kiwirail looks similar to the many roading projects into which money has already been funneled in vast quantities. The only proven factotum in both cases was that the State owned the assets. Labour being more than happy to spend up large on assets they own to pump the economy, not necessarily because it is good or necessary. But it follows that large scale spending in these areas will result in rising prices and costs, a form of inflation. Much of the policy around Kiwirail is ideological anyway.

  21. Angus 21

    “In its place, we’re seeing typical tory thinking as we go from clean and green to grey and grubby.”

    I know. And apparently, some pinkos are so impoverished that then need to steal wine for Christmas !

  22. RedLogix 22

    Angus,

    Bad idea to blog with a hangover, especially if you didn’t get laid last night. Your coming across as grumpy and spiteful.

  23. vto 23

    Well I suspect the National/Maori govt are probably heading in the right direction. After all roads will be in increasing demand as the decades steadily tumble by. As it has always been. Which is of course a different issue to the often muddled similar issue of fossil fuel burning, which is what powers most road use of course.

    I see, when I look into my plastic ball, a future where roads (or rather, corridors along which people and things move, whatever form that takes) will be more chokka than ever and driven on by vehicles which run on non-fossil fuels.

    It would be unwise to bet against this happenning. It would be betting against the history of human advancement. Hence, upgrading and maintaining those corridors is important.

    Go National / Maori !!

    p.s. don’t you think this govt and its approach to most things so far makes the old clark/cullen govt look old, tired, out of touch and angry/spiteful?

  24. infused 24

    Anita: I don’t mind the current passenger rail, it’s building new rail for passengers.

    sweeetdisorder: Yes, they also had this technology in 2001. It just needs to be pushed and forced by government imo. Car companies are going to mass produce this until they need to.

  25. Ianmac 25

    State owned railways. Is not that the same as State owned roads? Both need heaps of money to make them go.

  26. Anita 26

    infused,

    I don’t mind the current passenger rail, it’s building new rail for passengers.

    So can I assume you’re ok with
    1) replacing aging rolling stock so that existing passenger services can continue;
    2) purchasing additional rolling stock to cope with additional passenger numbers on existing routes; and
    3) maintaining track and other assets so that passenger services can continue?

  27. infused 27

    Anita: Yes.

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    Local body elections are coming up next month. And it looks like all Palmerston North candidates for Horizons (the Manawatu-Whanganui Regional Council) want to take action on climate change:Climate change is set to be a key issue in Palmerston North for the next three years if those wanting to get ...
    No Right TurnBy Idiot/Savant
    1 week ago
  • BORA reform is stalled
    Eighteen months ago, the government promised to strengthen the Bill of Rights Act, by explicitly affirming the power of the courts to issue declarations of inconsistency and requiring Parliament to formally respond to them. So how's that going? I was curious, so I asked for all advice about the proposal. ...
    No Right TurnBy Idiot/Savant
    1 week ago
  • Corbyn and Brexit
    As the Brexit saga staggers on, the focus is naturally enough on the Prime Minister and his attempts to achieve Brexit “do or die”. But the role played by the Leader of the Opposition is of almost equal interest and complexity. The first problem for Jeremy Corbyn is that he ...
    Bryan GouldBy Bryan Gould
    1 week ago
  • A ditch for him to die in
    Last week, English Prime Minister Boris Johnson boldly declared that he would rather die be dead in a ditch than delay Brexit. Unfortunately for him, the UK parliament accepted the challenge, and promptly dug one for him. The "rebellion bill" requires him to ask for and secure yet another temporary ...
    No Right TurnBy Idiot/Savant
    1 week ago
  • Warning! Warning! Danger Jacinda Ardern! Danger Marama Davidson! Warning!
    Lost In Political Space: The most important takeaway from this latest Labour sexual assault scandal, which (if I may paraphrase Nixon’s White House counsel’s, John Dean’s, infamous description of Watergate) is “growing like a cancer” on the premiership, is the Labour Party organisation’s extraordinary professional paralysis in the face of ...
    1 week ago
  • Union solidarity with Ihumatao land occupation
    by Daphna Whitmore Every Sunday for the past two months unionists from First Union, with supporters from other unions, have set out to the Ihumatao land protest, put up gazebos and gas barbeques, and cooked food for a few hundred locals and supporters who have come from across the country. ...
    RedlineBy Daphna
    1 week ago
  • Climate Change: The wrong kind of trees?
    Newsroom today has an excellent, in-depth article on pine trees as carbon sinks. The TL;DR is that pine is really good at soaking up carbon, but people prefer far-less efficient native forests instead. Which is understandable, but there's two problems: firstly, we've pissed about so long on this problem that ...
    No Right TurnBy Idiot/Savant
    1 week ago
  • No freedom of speech in Turkey
    Canan Kaftancioglu is a Turkish politician and member of the opposition Republican People's Party (CHP). Like most modern politicians, she tweets, and uses the platform to criticise the Turkish government. She has criticised them over the death of a 14-year-old boy who was hit by a tear gas grenade during ...
    No Right TurnBy Idiot/Savant
    1 week ago
  • Speaker: Tadhg Stopford: Why I’m standing for the ADHB
    Hi there, just call me Tim.We face tough problems, and I’d like to help, because there are solutions.An Auckand District Health Board member has nominated me for as a candidate for the ADHB, because her MS-related pain and fatigue is reduced with hemp products from Rotorua.  Nothing else helped her. If I ...
    1 week ago
  • Good little vassals
    The Inspector-General of Intelligence and Security has published their report on whether the SIS and GCSB had any complicity in American torture. And its damning. The pull quote is this:The Inquiry found both agencies, but to a much greater degree, the NZSIS, received many intelligence reports obtained from detainees who, ...
    No Right TurnBy Idiot/Savant
    1 week ago
  • Who Shall We Turn To When God, And Uncle Sam, Cease To Defend New Zealand?
    Bewhiskered Cassandra? Professor Hugh White’s chilling suggestion, advanced to select collections of academic, military and diplomatic Kiwi experts over the course of the past week, is that the assumptions upon which Australia and New Zealand have built their foreign affairs and defence policies for practically their entire histories – are ...
    1 week ago
  • The Politics of Opposition
    For most of the time I was a British MP, my party was out of government – these were the Thatcher years, when it was hard for anyone else to get a look-in. As a front-bencher and shadow minister, I became familiar with the strategies required in a parliamentary democracy ...
    Bryan GouldBy Bryan Gould
    1 week ago
  • More expert comments on the Canadian fluoride-IQ paper
    The Green et al (2019) fluoride/IQ is certainly controversial – as would be expected from its subject (see If at first you don’t succeed . . . statistical manipulation might help and Politics of science – making a silk purse out of a sow’s ear). Anti-fluoride campaigners have been actively promoting it ...
    1 week ago
  • The return to guerrilla war in Colombia
    by Gearóid Ó Loingsigh On August 29th a video in which veteran FARC (Revolutionary Armed Forces of Colombia) commander Iván Márquez announced that they had taken up arms again was released. There was no delay in the reaction to it, from longtime Liberal Party figure and former president Uribe, for ...
    RedlineBy Admin
    1 week ago
  • Air New Zealand identifies this enormous plot of unused land as possible second airport site
    Air New Zealand couldn’t believe its luck that this seemingly ideal piece of real estate had so far gone entirely unnoticed. Air New Zealand’s search for a site to build a second Auckland Airport may have made a breakthrough this afternoon, after employees scanning Google satellite imagery spotted a huge, ...
    The CivilianBy admin
    2 weeks ago
  • Redline on the Labour Party
    No-one on the anti-capitalist left in this country today puts forward a case that Labour is on the side of the working class.  There are certainly people who call themselves ‘socialist’ who do, but they are essentially liberals with vested interests in Labourism – often for career reasons. Nevertheless, there ...
    RedlineBy Admin
    2 weeks ago
  • New Fisk
    No Right TurnBy Idiot/Savant
    2 weeks ago
  • Labour’s failure
    When National was in government and fucking over the poor for the benefit of the rich, foodbanks were a growth industry. And now Labour is in charge, nothing has changed: A huge demand for emergency food parcels means the Auckland City Mission is struggling to prepare for the impending arrival ...
    No Right TurnBy Idiot/Savant
    2 weeks ago
  • Ardern attempts to vaccinate Clarke Gayford live on television to prove that it’s safe
    Gayford, pictured here on The Project, before things got wildly out of control. A bold public relations move by the Government to encourage parents to vaccinate their children has gone horribly wrong. Prime Minister Jacinda Ardern appeared on tonight’s episode of Three’s The Project, where the plan was for her ...
    The CivilianBy admin
    2 weeks ago
  • Has Mr. Whippy gone too far by parking on our front lawns?
    Mr. Whippy’s business model has driven it down a dark road of intimidation. Residents in major centres around the country are becoming disgruntled by the increasingly aggressive actions of purported ice cream company Mr. Whippy, who have taken to parking on people’s front lawns and doorsteps in a desperate attempt ...
    The CivilianBy admin
    2 weeks ago
  • Cleaning up the water
    Today the government released its Action Plan for Healthy Waterways, aimed at cleaning up our lakes and rivers. Its actually quite good. There will be protection for wetlands, better standards for swimming spots, a requirement for continuous improvement, and better standards for wastewater and stormwater. But most importantly, there's a ...
    No Right TurnBy Idiot/Savant
    2 weeks ago
  • Fronting up
    Today I appeared before the Environment Committee to give an oral submission on the Zero Carbon Bill. Over 1,500 people have asked to appear in person, so they've divided into subcommittees and are off touring the country, giving people a five minute slot each. The other submitters were a mixed ...
    No Right TurnBy Idiot/Savant
    2 weeks ago
  • Politics of science – making a silk purse out of a sow’s ear
    Anti-fluoride activists have some wealthy backers – they are erecting billboards misrepresenting the Canadian study on many New Zealand cities – and local authorities are ordering their removal because of their scaremongering. Many New Zealanders ...
    2 weeks ago
  • Democracy – I Don’t Think So
    So, those who “know best” have again done their worst. While constantly claiming to be the guardians of democracy and the constitution, and respecters of the 2016 referendum result, diehard Remainers (who have never brought themselves to believe that their advice could have been rejected) have striven might and main ...
    Bryan GouldBy Bryan Gould
    2 weeks ago
  • Government says it will now build just one really nice home
    Following publication of this article, the Ministry has requested it to be noted that this supplied image is not necessarily representative of what the final house will look like, and it “probably won’t be that nice.” As part of today’s long-anticipated reset of the Government’s flagship KiwiBuild policy, Housing Minister ...
    The CivilianBy admin
    2 weeks ago
  • Imperialism and your cup of coffee
    Over the next week or two we will be running three synopses of parts of the opening chapter of John Smith’s Imperialism in the 21st Century (New York, Monthly Review Press, 2016).  The synopsis and commentary below is written by Phil Duncan. Marx began Capital not with a sweeping historical ...
    RedlineBy Admin
    2 weeks ago
  • Still juking the stats
    The State Services Commission and Ombudsman have released another batch of OIA statistics, covering the last six months. Request volumes are up, and the core public service is generally handling them within the legal timeframe, though this may be because they've learned to extend rather than just ignore things. And ...
    No Right TurnBy Idiot/Savant
    2 weeks ago

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